Part 1 --- Read the information below carefully to answer questions (1-8) * (2 Points) KENT Ltd produces a range of products. Manufacturing is undertaken using one of two processes: the Alpha and the Omega Processes. All of the products are manufactured in batches. The current pricing policy has been to absorb all overheads using direct labour hours to obtain total cost. A recent detailed analysis has examined overhead cost; the results are: Analysis of overhead costs Cost per month () Monthly volume Alpha Process cost 192,000 960 hours Omega Process cost 89,600 2,560 hours Set-up cost 85,800 520 set-ups Handling charges 91,200 380 movements Other overheads 101,400 (see below) Total overhead costs 560.000 There are 2.000 direct labour hours available cach month Alpha Two of KENT's products are a JT101 and a GR27. JT10ls are produced by the Alpha Process in a simple operation. GR27s are manufactured by the Omega Process. Both products are sold by the metre. Details of the two products are: JT101 GR27 Monthly volume 1.000 metres 500 metres Batch size 1.000 metres 50 metres Processing time per batch 100 hours Omega 25 hours Set-ups per batch Handling charges per batch 1 movement 5 movements Materials per metre 16 15 Direct labour permetre (Direct cost) hour 1 hour Direct labour is paid at 16 per hour. Q. The overhead allocation rate per metre, usign the traditional costing system based on direct labour hours, is equal to I set-up 2 set-ups 140 62.5 280 125 KENT Ltd produces a range of products, Manufacturing is undertaken using one of two processes: the Alpha and the Omega Processes. All of the products are manufactured in batches. The current pricing policy has been to absorb all overheads using direct labour hours to obtain total cost. A recent detailed analysis has examined overhead cost; the results are: Analysis of overhead costs Cost per month (E) Monthly volume Alpha Process cost 192,000 960 hours Omega Process cost 89,600 2,560 hours Set-up cost 85,800 520 set-ups Handling charges 91,200 380 movements Other overheads 101,400 (see below) Total overhead costs 560,000 There are 2,000 direct labour hours available each month. Two of KENT's products are a JT101 and a GR27. JT10ls are produced by the Alpha Process in a simple operation. GR27s are manufactured by the Omega Process. Both products are sold by the metre. Details of the two products are: JT101 GR27 Monthly volume 1,000 metres 500 metres Batch size 1.000 metres 50 metres Processing time per batch Alpha 100 hours Omega 25 hours Set-ups per batch I set-up 2 set-ups Handling charges per batch 1 movement 5 movements Materials per metre 16 EIS Direct labour per metre (Direct cost) hour 1 hour Direct labour is paid at 16 per hour. Q. Calculate the total cost per metre for GR27s using activity-based costing (ABC). Assume that Other overheads' are allocated using direct labour hours. 69.76 96.45 2453.35 73.45 7 Question * (2 Points) KENT Ltd produces a range of products. Manufacturing is undertaken using one of two processes: the Alpha and the Omega Processes. All of the products are manufactured in batches. The current pricing policy has been to absorb all overheads using direct labour hours to obtain total cost. A recent detailed analysis has examined overhead cost; the results are: Analysis of overhead costs Cost per month () Monthly volume Alpha Process cost 192.000 960 hours Omega Process cost 89,600 2.560 hours Set-up cost 85,800 520 set-ups Handling charges 91,200 380 movements Other overheads 101,400 (see below) Total overhead costs 560,000 There are 2,000 direct labour hours available each month. Two of KENT's products are a JT101 and a GR27. JTi0ls are produced by the Alpha Process in a simple operation. GR27s are manufactured by the Omega Process. Both products are sold by the metre. Details of the two products are: JT101 GR27 Monthly volume 1.000 metres 500 metres Batch size 1.000 metres 50 metres Processing time per batch 100 hours Omega 25 hours Set-ups per batch 1 set-up 2 set-ups Handling charges per batch 1 movement 5 movements Materials per metre 16 EIS Direct labour permetre (Direct cost) y hour % hour Direct labour is paid at 16 per hour. Alpha Q. The handling charges allocated per movement for GR27s is equal to 240 380 .24 5 6 Question * (2 Points) KENT Ltd produces a range of products. Manufacturing is undertaken using one of two processes: the Alpha and the Omega Processes. All of the products are manufactured in batches. The current pricing policy has been to absorb all overheads using direct labour hours to obtain total cost. A recent detailed analysis has examined overhead cost; the results are: Analysis of overhead costs Cost per month () Monthly volume Alpha Process cost 192.000 960 hours Omega Process cost 89,600 2,560 hours Set-up cost 85,800 520 set-ups Handling charges 91,200 380 movements Other overheads 101.400 (see below Total overhead costs 560,000 There are 2.000 direct labour hours available each month. Two of KENT's products are a JT101 and a GR27. JTi0ls are produced by the Alpha Process in a simple operation, GR27s are manufactured by the Omega Process. Both products are sold by the metre. Details of the two products are: JT101 GR27 Monthly volume 1.000 metres 500 metres Batch size 1.000 metres 50 metres Processing time per batch Alpha 100 hours Omega 25 hours Set-ups per batch 1 set-up Handling charges per batch 1 movement 5 movements Materials per metre 16 15 Direct labour permetre (Direct cost) 1 hour hour Direct labour is paid at 16 per hour. 2 set-ups Q. What is the set-up cost per metre for JT101s 0.165 165 1 42.9 (3 Points) KENT Ltd produces a range of products. Manufacturing is undertaken using one of two processes: the Alpha and the Omega Processes. All of the products are manufactured in batches. The current pricing policy has been to absorb all overheads using direct labour hours to obtain total cost. A recent detailed analysis has examined overhead cost; the results are: Analysis of overhead costs Cost per month () Monthly volume Alpha Process cost 192,000 960 hours Omega Process cost 89,600 2,560 hours Set-up cost 85,800 520 set-ups Handling charges 91,200 380 movements Other overheads 101.400 (see below) Total overhead costs 560,000 There are 2.000 direct labour hours available cach month. Two of KENT's products are a JT101 and a GR27. JT10ls are produced by the Alpha Process in a simple operation. GR27s are manufactured by the Omega Process. Both products are sold by the metre. Details of the two products are: JT101 GR27 Monthly volume 1.000 metres 500 metres Batch size 1.000 metres 50 metres Processing time per batch Alpha 100 hours Omega 25 hours Set-ups per batch 1 set-up 2 set-ups Handling charges per batch I movement 5 movements Materials per metre 16 15 Direct labour permetre (Direct cost) % hour 1 hour Direct labour is paid at 16 per hour. Q. Calculate the total cost per metre for both JTi0ls and GR27s detailed above, using traditional costing based on direct labour hours. 172 & 171 respectively 164 & 136 respectively 304 & 303 respectively 312 & 311 respectively KENT Ltd produces a range of products. Manufacturing is undertaken using one of two processes: the Alpha and the Omega Processes. All of the products are manufactured in batches. The current pricing policy has been to absorb all overheads using direct labour hours to obtain total cost. A recent detailed analysis has examined overhead cost; the results are: Analysis of overhead costs Cost per month () Monthly volume Alpha Process cost 192,000 960 hours Omega Process cost 89,600 2,560 hours Set-up cost 85,800 520 set-ups Handling charges 91,200 380 movements Other overheads 101,400 (see below) Total overhead costs 560,000 There are 2,000 direct labour hours available each month. Two of KENT's products are a JT101 and a GR27. JT10ls are produced by the Alpha Process in a simple operation, GR27s are manufactured by the Omega Process. Both products are sold by the metre. Details of the two products are: JT101 GR27 Monthly volume 1,000 metres 500 metres Batch size 1,000 metres 50 metres Processing time per batch Alpha 100 hours Omega 25 hours Set-ups per batch 1 set-up 2 set-ups Handling charges per batch 1 movement 5 movements Materials per metre 16 15 | Direct labour per metre (Direct cost) 1 hour 1 hour Direct labour is paid at 16 per hour. Q. The cost of direct material per metre for GR27 is equal to 15 7.5 16 8